Edwards, Grijalva, Ellison, Schakowsky, DeFazio, and others: Chained CPI Should Have No Part in Deficit Deal

Press Release

Representatives Edwards (MD-04), Grijalva (AZ-07), Ellison (IL-05), Schawkowsky (IL-06), Defazio (OR-04), and others condemned the use of the chained CPI today in any deficit reduction deal. The chained CPI represents an immediate benefits cut for over 56 million seniors, children, veterans, and the disabled. The Congressional Budget Office finds that the chained CPI grows more slowly than does the traditional CPI, stating "the effects would be felt with each [cost-of-living adjustment], when benefits would be slightly smaller than they would have been without the change in indexing. The impact would be greater the longer people received benefits." Therefore, the average Social Security recipient, who at age 65 receives just $15,000 per year, will suffer cuts of $650 a year by age 75 and $1,130 a year by age 85. All total, those losses by age 95 for a retiree with average earnings would be nearly $25,000. Members of Congress were joined by the National Committee to Preserve Social Security and Medicare (NCPSSM), and numerous other groups (see below).

"We must reach a deal and we must strengthen Social Security. But those two goals must not be conflated at this critical moment. Using the chained CPI as a mechanism to achieve savings is unfair to beneficiaries and further reduces already modest benefits for millions of Americans," said Representative Edwards.

"The less money our Social Security recipients -- including 9 million veterans -- are able to spend, the less money goes to the businesses that create jobs. Chained CPI makes life harder for millions of retirees, weakens Social Security and doesn't reduce the deficit by a penny. It's a Beltway fig leaf that I will never support, and I call on my colleagues to make their feelings known as soon as possible before this becomes yet another piece of conventional wisdom that makes things worse," said Representative Grijalva.

"102 Democrats signed a letter saying Social Security should be off the table in these negotiations. Any agreement brought to the House floor is going to need many of those same Democrats to pass, so it will be difficult to pass something that includes a cut for those who use every dollar from their Social Security checks to pay for food and housing," said Representative Ellison.

"We cannot punish seniors for a deficit they did not create. Millionaires and billionaires should pay the Clinton era tax rates- period. If we do nothing, millionaires and billionaires pay more so why should we diminish the already inadequate COLA as part of a final deal? I am urging the president, and my colleagues, to reject the chained CPI just to avoid the so-called "fiscal cliff'," said Representative DeFazio.

"In order for Republicans to agree to ask even a single penny more from the very wealthiest Americans, they are demanding cuts to programs like Social Security and Medicare that help the poorest adults -- seniors. I refuse to accept that we need to ask poor seniors to sacrifice in order to have the most fortunate give a little bit more. We should not put a higher burden on lower-income and middle-class seniors and the millions of American families who depend on their earned benefits. To do so in order to shield the wealthiest Americans from a tax increase is nothing less than immoral, said Representative Schakowsky.

"Those who want to cut Social Security are burying this plan's harsh nature in technocratic language by calling it "chained CPI indexing.' But big words can't hide hard truths: this plan is a cut for America's seniors, one that would harm our oldest and most vulnerable seniors the most, one that asks for no shared sacrifice from anyone else in the nation. That is simply, brutally wrong," said Representative Rush Holt, NJ-12.

"Pure and simple, this is a benefits cut placed largely on the poor and middle class. In fact, cutting COLAs would be especially harmful to women -- including those of color -- who live longer but have less wealth than men. Instead of protecting the American people against growing retirement, disability and survivorship risks, the chained CPI would do the opposite by weakening the earned inflation protection of current and future beneficiaries," said Dan Adcock, Director of Government Relations and Policy, NCPSSM.

The following groups supported this event: AFL-CIO, Alliance for Retired Americans, Latinos for a Secure Retirement, NCPSSM, National Organization for Women, National Women's Law Center, ProgressiveCongress.org, Progressive Change Campaign Committee, Social Security Works, Strengthen Social Security Coalition.